August 6, 2011

Corporate runaways can’t trump the greater good

Protesting: Workers at IQT Solutions were suddenly jobless and denied their final paycheques when the company abruptly closed its doors. More and more young workers are employed at call centers. Photo by the Toronto Star.

The abrupt closure of three IQT call-centre operations in Oshawa, Trois-Rivières and Laval has left 1,200 workers reeling, and government agencies scratching their heads. How can a company (in this case a multi-million dollar, multi-national telecommunications contractor) simply pack up and leave, literally overnight? How can they walk away from legal obligations, washing their hands of back pay and severance? Seriously, how?

Weeks have gone by but no one, as of yet, has any real answers to these questions.

Governments appear incapable of even tracking down basic information about the company, who’s in charge and whether or not they’re actually bankrupt.

There’s an assumption among Canadians that there must be rules and regulations holding corporations to account. But this latest fiasco is a rude awakening.

Indeed, we’ve seen this storyline many times before. In 2009, 2,400 non-union auto parts workers at Progressive Moulded Products (PMP) in Toronto faced a similar ordeal — returning from vacation only to learn that their employer had fled town, taking their separation payments with them. CAW members have seen it first-hand, too, at companies like Collins & Aikman in Scarborough, Aradco and Aramco in Windsor, and others.

Each case prompted a public outcry and a spontaneous fight back. Workers demanded what was legally owed to them. But after fighting long and hard, they inevitably end up with less than they are owed.

So IQT is not the first company to successfully exploit this effective loophole in the regulations that govern business. And it won’t be the last — unless we tighten up the rules.

In this era of deregulation, it seems private companies are enabled to padlock their doors, pack their bags and take their business elsewhere. The same week as the IQT closures in Canada, the company announced 900 new jobs in Nashville, Tennessee — taking advantage of millions in lucrative public incentives to relocate. Those plans were scrapped when municipal leaders in Nashville caught wind of the company’s disregard for workers and their communities. Yet Canadian officials seem toothless when it comes to tracking down the company and enforcing its legal obligations.

To its credit, Ontario’s labour ministry is in the midst of an investigation while providing retraining and job search assistance to workers through a newly-opened action centre. Quebec officials are urging displaced workers to lodge individual complaints with the labour board in the hopes of building a file on the company.

Meanwhile, Ottawa has been strangely silent about the case, telling workers only that they can file for EI. IQT workers don’t yet qualify for federal Wage Earner Protection Program funds since there’s not been an official bankruptcy filed. So far, no one in the Harper government cares to comment.

For years, governments have been watering down corporate regulations, all in the name of fighting “red tape.” Restrictions on corporations that would protect the greater good, we’ve been told, are job-killers. Establishing criteria to govern corporate behaviour is considered a barrier to investment.

But this whole approach puts reckless multinational corporations like IQT in the driver’s seat, and leaves vulnerable workers in the dust.

It’s time we stopped this trend, which is justified by an underlying faith that the private sector is always efficient. Governments need the tools to hold corporate deadbeats to account, to discourage imitators and adequately remedy situations like the tragedy at IQT. Efficient, effective regulatory tools wouldn’t disadvantage good corporate citizens, but would offer some protection for workers’ rights.

A public discussion on the need for better worker protection regulations is both necessary and overdue. We need an open and honest dialogue among stakeholders, to get some new ideas on the table.

Here are some proposals to throw into the mix:

• Establish clear protocols for public notice and justification of lay-offs.

• Strong workplace closure legislation, with special provisions to account for non-industrial, non-capital intensive workplaces like call centres and retail shops (where there’s little capital equipment that can be seized and sold to pay outstanding debts).

• Increase the funds covered by the wage protection system and extend its reach to closures that are not formal bankruptcies.

It is both immoral and economically counterproductive to allow deadbeat corporations like IQT to commit these wrongs with impunity. As a society, we must take a hard line with employers who think they’re beyond the greater good.